Does fair trade work?

Author: Katharina Habon | Photo: Stephan Brendgen

Two identical pairs of trousers: one was made largely under fair working conditions, but where and how the other pair was produced is impossible to trace. The prices are comparable. Which pair will you buy?

CWS-boco has taken this decision out of its customers’ hands for 160,000 items of workwear and has converted four collections for the skilled labour and industry sectors entirely to Fairtrade cotton. In this category, the Haniel company was the leader in its industry in Germany in 2017. Dirk Baykal had a major part to play in this. “We believe in the philosophy of a long lifespan – for both our products and our business relationships,” says Baykal, CSR coordinator in the CWS-boco Supply Chain Management procurement unit. “This means the Fairtrade certification system is a very good fit for us.”

Fairtrade Germany CEO Dieter Overath confidently describes the mission of his non-governmental organisation (NGO) as a “revolution in the sector”. Why should Western standards for working conditions and environmental protection not apply to developing countries, too? As well as the moral reasons, there are solid economic arguments for this. “If we carry on as we are, we shall have problems in getting sufficient quantities of raw materials ten years from now,” he says. He backs up this prediction with a survey in which 5,000 children in developing countries were asked what jobs they dreamt of doing.

Almost 99 percent replied that they did not want to follow in their parents’ footsteps. “In the past, the cotton field was like a closed universe, but even there they now have internet, which offers children new prospects,” Overath explains. But who will produce cotton in the future if the children of small farmers leave the villages? This is an existential question, not just for the cotton farmers but also for the manufacturers who process their output – and, ultimately, for CWS-boco itself. Dirk Baykal observes a similar “snowball effect” in southeast European countries such as Bulgaria, Romania and Macedonia, where textile industry production plants are often located. “People of working age emigrate to countries like Spain, because even as unskilled labourers they can earn more there than at home. Only the elderly and children are left behind,” he explains.

The farmers’ remote cotton cooperative can be reached only by minibus.

Foto: Stephan Brendgen

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Simple conditions – outside…

Foto: Stephan Brendgen

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…and inside the small factory.

Foto: Stephan Brendgen

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Dirk Baykal hears how the farmers do without hazardous pesticides and use natural substances instead.

Foto: Stephan Brendgen

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Permanent employment instead of temporary employment status, more salary and shorter working hours – the gratitude shown by the employees has touched Dirk Baykal very much.

Foto: Stephan Brendgen

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One for all: the farmers used the Fairtrade premium to buy a tractor that makes it easier to bring in the harvest and transport cotton to the spinning plant.

Foto: Stephan Brendgen

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The price is relative

The only problem is, what do we do next? “At Fairtrade, we try to make the production of the end products transparent and to give all those involved in the supply chain credit,” Overath says. For instance, the wearer can find the Fairtrade code on their sewn-in label and enter it into the NGO’s website to find out that a cooperative in Balangir, East India, is benefiting from the sale of the cotton for their work jacket – together with photos of the farmers and their families. Dirk Baykal has experienced at first hand the emotional impact that such transparency can have. As a result of his demands on behalf of CWS-boco, the working and living conditions of the employees at a factory in Pakistan were improved substantially: they got permanent contracts instead of being treated as temporary workers, more pay and shorter working hours, as well as accommodation in the town centre instead of on the production site. “When we visited the factory a few months later for an inspection, it was truly moving to see how grateful the employees on the ground were,” he recalls.

The CSR coordinator hopes “that sustainability and humanity will be taken into account in all business decisions”. At CWS-boco, he is “fortunately” not alone in this. Nevertheless, it would be painting too rosy a picture to claim that he had been pushing at open doors across all departments in the company from the outset in his advocacy of Fairtrade. “I had to work to persuade people,” he says. After all, everybody could see that fairly-traded raw cotton would be more expensive to buy than the conventionally-grown sort. This is because the licensing fees for the Fairtrade stamp include not just the costs of “awareness campaigns”.

The standards also require the parties to each contract to pay a minimum price that covers farmers’ average expenditure on production, irrespective of raw materials speculation and stock market fluctuations. In addition, they receive a premium for social costs, infrastructure and education. This enables schools to be built, for example – “so that children do not turn their backs on their community because of a lack of prospects but get trained as, for example, agricultural engineers who can build dams to prevent flooding and thus provide larger crop yields”, Overath hopes.

CWS-boco also incurred additional expense because the company had to ensure that employees’ rights were observed at all processing stages. This includes a ban on child or forced labour, a statutory minimum wage, equal pay for equal work by men and women and freedom for trade unions to organise. It was necessary to present appropriate evidence from all production sites, ranging from spinning plants to dyeing and weaving mills and clothing production factories. “Nevertheless, the additional cost of the switch to Fairtrade should be viewed in our calculations as relative to the long lifespan of workwear, by contrast with the fashion industry,” Baykal says, setting out the point that he used, in particular, to win over the sceptics in his own company.

Sustainability in the supply chain

In 2016, CWS-boco launched its first workwear collection with Fairtrade-certified cotton. To get an idea of what Fairtrade can achieve locally, Dirk Baykal travelled to India.

Pragmatism, not idealism

The first work trousers, jackets and vests with the Fairtrade cotton label became available from CWS-boco at the beginning of 2016. “In our industry, this put us ahead of our time. Today, we have an advantage when competing for orders from municipal companies because we have these products in our portfolio,” Baykal says, outlining the change ofheart that has taken place since then.

The NGO, too, had to do some rethinking in its cooperation with CWS-boco. To be entitled to use the label, an item of clothing made from blended fabric has to have a cotton content of at least 50 percent. That cotton, in turn, has to be 100 percent fairly traded. “As a result of the specific requirements for workwear, the minimum cotton content here is 30 percent,” Dieter Overath says. Why? “Because cotton fabric gets thinner with each wash, and as a result it tears relatively quickly and develops a lot of little knots,” Baykal explains. For this reason, CWS-boco’s collections usually have a material mix with a high polyester content. “More cotton would have a negative impact on the clothing’s lifespan and would not save resources,” he says.

The closer relationship between the two sides is often seen heretically by critics as “Fairtrade bowing to business”. However, Overath is too much of a pragmatist to get bogged down in debates about the principles of development policy. His aim is not to achieve an ideal. “There is no point in setting requirements that go beyond the demands of the market,” he says. “In the end, if we cannot sell our products and therefore do not have any positive impact in the developing world, we may as well throw our label in the bin.”

Regular checks

Around 100 million households in 70 countries worldwide – particularly in western and central Africa, India, Pakistan and Central Asia – are involved in cotton production. The 46,300 farmers who grow Fairtrade cotton are forbidden from using genetically-modified seeds, hazardous chemicals or artificial irrigation. Observance of standards for environmental protection and working conditions in the whole supply chain is monitored by the independent certification company FLO-CERT.